Shares for rights scheme voted back in by MPs

17 April 2013

The shares of rights scheme has been voted back into the Growth and Infrastructure Bill by MPs after the Lords introduced an amendment to the Bill to scrap all plans for the programme.

Under the proposals, employees would be given the option to swap fundamental rights such as the right to redundancy pay, to claim unfair dismissal, and to request training and flexible working patterns, in return for shares in their organisation. The government claims the choice to do so would be entirely voluntary, but there is scepticism has been raised over this argument seeing as employees and candidates for the few jobs available in the UK today are in less of a position to bargain than employers. For instance, if a vacancy is advertised for an employee-owner, who would be required to sign up for the shares-for-rights scheme, many jobseekers would be under huge pressure to take on the role regardless.

A consultation on the plans revealed widespread opposition from both workers’ representatives and employers, with less than a handful of the total 209 responses in favour proposals.

However, this did not deter the government from trying to pass the scheme into law. When it reached the House of Lords, however, it was deemed to be unacceptable.

Yesterday (16 April, 2013), MPs voted on the plans once again and they were passed back into the Growth and Infrastructure Bill by a margin of 277 to 239, despite support for the Lords’ amendment to scrap Clause 27 (which contains plans for the programme) from the opposition. The Coalition attempted to underline the “voluntary” nature of the scheme by making it explicit in law that jobseekers should not have their benefits sanctioned for refusing a role that requires them to enter into the scheme. But this amendment does not go far enough.

As Chukka Umunna, Shadow Business Secretary, told the Commons: “This is an ill-thought-out and bad idea, and that is why there is strong cross-party opposition. Lord Forsyth put it well in the Lords when he said that the proposal ‘has all the trappings of something that was thought up by someone in the bath’.”

“This is supposed to be a ‘growth’ Bill,” he continued. “No evidence whatever appears to have been adduced by the Government to show how this measure would boost growth.”

Indeed, he noted that the only possible consequence of the scheme would be to reduce employee job security and increase distrust between workers and their employers. After all, if a person has given up their right to redundancy pay, they will naturally assume they will be the first to go if the business hits trouble.

Labour MP John McDonnell also warned that these proposals could be the thin end of the wedge for further erosion of rights in the future.

“This measure sets an extremely dangerous precedent,” he said. “The idea of selling rights could creep into other areas of policy making. For example, will landlords in future be able to offer reduced rents for reductions in security of tenure? Will consumer rights be sold for a reduction in the price of particular goods? That is much more significant than the scheme being proposed in this debate. The idea that rights can be sold in any sphere of government activity sets a dangerous precedent for the future development of rights in this country.”